DocketNumber: No. 34220.
Citation Numbers: 198 So. 625, 189 Miss. 693
Judges: <bold>Smith, C.J.,</bold> delivered the opinion of the court.
Filed Date: 11/11/1940
Status: Precedential
Modified Date: 1/12/2023
I dissent from the majority opinion herein, as I think it is clearly wrong in the construction of section 5196 of the Code of 1930, and in overruling certain cases named in the opinion.
A careful reading of section 5196 shows that a person who does the things named in the statute on behalf of the insurance company is the agent of the company for that purpose, although not a general agent. The knowledge of the agent and his acts on behalf of the company, are *Page 706 the acts of the insurance company itself, or of its principal officers, or even of the board of directors.
After setting out the various points in the statute constituting such person an agent of the company, the section continues: "Shall be held to be the agent of the company for which the act is done or the risk is taken as to all the duties and liabilities imposed by law, whatever conditions or stipulations may be contained in the policy or contract." And the section then provides that any person knowingly procuring through fraudulent representations the payment, or obligation for the payment, of a premium of insurance, shall be punished by a fine of not less than $100 nor more than $500, or be imprisoned for not more than one year.
The majority opinion sets out some purposes of this statute, but not all. One purpose of the statute is to make the insurance companies responsible for the acts of their agents, and to cause them to select as their agents qualified and proper persons. The statute has been construed by this Court in numerous decisions, and has been re-enacted by the legislature under such constructions; and through such re-enactment without change the construction becomes a part of the statute itself.
In Stewart v. Coleman Co.,
It will be noted that the statute nullifies all stipulations in the policies which would avoid the policies in the absence of knowledge on the part of the agent, where the agent acted in a particular capacity, with knowledge of the facts. While the case of Stewart v. Coleman Co., supra, seems to have been the first in which the statute was held to control, the same rule had prevailed for many years prior thereto.
For instance, in Big Creek Drug Co. v. Stuyvesant Ins. Co.,
In the case of Stewart v. Coleman Co., supra, it was said: "Section 2615, Code 1906 (section 5078, Hemingway's Code), makes the agent delivering an insurance policy the agent of the company for that purpose and the company cannot avoid a policy because of other insurance, if the agent writing the insurance for the company had knowledge of the facts."
In Aetna Ins. Co. v. Smith, McKinnon Son,
In Phoenix Ins. Co. v. Randle,
The last-named case is almost identical with the case at bar. In St. Paul F. M. Co. v. Loving,
Many decisions could be cited antedating the case of Stewart v. Coleman Co., supra, to show that the agent *Page 709 who performed a particular act bound the company within the scope of such act as he was authorized to do, or did, and which was accepted by the insurance company.
In Hartford Fire Ins. Co. v. Clark,
I shall not undertake to set forth all of the decisions, or to review all of those referred to in the majority opinion here; but the decisions referred to in this opinion construed the law in regard to the effect of the statute; and by the re-enactment of the statute without change in 1930, the construction so placed upon it became a part of the statute itself. Where a statute was re-enacted after its erroneous construction the Court must assume that the re-enactment was with full knowledge on the part of the legislature of such construction. Smith v. Richardson, 2 Miss. Dec. 287. Re-enactment of a statute *Page 710
which has been judicially construed is an adoption of the construction, unless intention to the contrary appears in the statute so re-enacted. White v. Illinois Cent. R. Co.,
The legislature, by re-enacting statute in the same terms adopts the construction placed on the statute by the highest court of the state, etc.
"Where a statute has been construed by the Supreme Court, and afterwards re-enacted in substantially the same terms, the Legislature by such re-enactment adopts such construction along with the statute." White v. Williams,
"Construction of a statute, subsequently re-enacted, as prohibiting judges from instructing juries without written requests, will not be departed from." Masonite Corp. v. Lochridge,
The same rule prevails at common law, and in practically all the states. In Black's Interpretation of Law, (2 Ed.), 596, it is said: "When the legislature revises the statutes of the state after a particular statute has been judicially construed, without changing that statute, it is presumed that the legislature intended that the same construction should continue to be applied to that statute." And in the same work, at page 607, it is said: "A statute literally or substantially re-enacting a prior statute after its words have received a judicial interpretation must be regarded as adopted with knowledge of such construction and with the intention that it should *Page 711 thereafter be interpreted in the same way." See, also, 25 R.C.L. 1075, sec. 297; 59 C.J. p. 1061, sec. 625.
There is sound reason for the rule as to re-enactment of the statute without change, carrying with it the construction placed upon it by the highest court of the state. It is very desirable that stability be had in the decisions of such court. Every person and every officer of the state other than this Court are bound by the construction placed upon it by this Court, to conduct their business and social relations upon the theory that the law has been settled by the highest authority known to the law. The legislative department is vested with the power to change or amend laws, and it is presumed to keep up with the construction placed upon statutes, that it may properly and intelligently exercise this function. Where the legislature is readopting a code, it is presumed to, and in fact does, through appropriate committees, investigate the sections of the Code and the constructions placed upon them, and may change the laws if they need changing. That function should not be exercised by the Court.
It is true that the Court has the power to overrule its decisions construing the statutes prior to their re-enactment or readoption or recodification by the legislature; but that power should cease when its decisions have received the sanction of the legislature. It has been said that it is a dangerous thing to be wiser than the law; and those exercising this power should always bear in mind that changing decisions may greatly disturb transactions made in accordance with the decisions of the Court. The rule that the legislature, by re-enacting a statute without change, also adopted the construction placed upon it by the Court is clearly conducive to the public welfare; for when the legislature changes the law its operation is prospective or forward-looking; but when the Court changes its decision it unsettles business and transactions made on the faith of the Court's decisions in the conduct of their business and personal relations. *Page 712
I think it is beyond the rightful power of the Court to overrule a decision which has received legislative sanction through re-enactment of the statute and the construction placed upon it by the Court. The statute here involved serves a most wholesome purpose. Every person who takes an insurance policy knows that as a rule they contain many provisions limiting the liability and the rights of the parties; and it is difficult for even the legal mind to reach a correct understanding of many of these provisions. It is the purpose of section 5196 of the Code to make the act of the agent the act of the insuring company, insofar as it falls within the authority confided to the agent, with the intention that the company shall exercise caution in selecting proper agents to deal with the public. Under our laws only corporations can engage in the insurance business, or become insurers of persons or property; and since a corporation can only act through agents, it is a wise policy to require that the corporation shall be bound by the act of its agent within the field, and for the purposes of his employment by the corporation; and the doctrine of waiver and estoppel should be applied in proper cases.
Overruling a line of decisions which have been in force for a long time in such a general field as insurance operates will certainly affect many contracts.